What happens if I could not make the payment of money or deliver shares on the pay-in day ?
In case of purchase on your behalf, the brokerage house has the liberty to close out transactions by selling securities in case you fail to make full payment to them for the execution of contract before pay-in day as fixed by Stock Exchange for the concerned settlement period unless you already have an equivalent credit. The shortages in case of sales are met through auction process and the difference in price indicated in Contract Note and price received through auction is paid by member to the Exchange which is then liable to be recovered from the client.
In case payments are not made for the purchases before pay-in day or if equivalent credit is not there in the trading account then the broker may close-out the transaction by selling shares. In case shares sold are not delivered to the broker before the pay-in date then such shares are auctioned by the Exchange. The auction charges are payable by the customer.
